No-Holds-Barred Price War Brings Gas Down To 47 Cents In Michigan

As three Michigan gas stations aggressively battled for customers last week in an all-out price war, sending gas prices down to 47 cents per gallon—just pennies above the federal and state excise taxes—police had to step in to direct traffic, and Americans demonstrated just how serious they are about filling up for next to nothing.

On that day, the consumers were the only winners—kind of. What with the average car holding only 14 gallons of gas and consumers spending about 45 minutes idling in line, they wasted about three-quarters of a gallon of gas and 45 minutes of their time to save, at most, $14.00. We would be hard pressed to consider that much of a win.

The gas stations were the biggest loser. Privately owned gas stations typically have the narrowest profit margins in the business, and the average gas station only keeps about 7 to 10 cents of each gallon of gas—at normal prices. And that’s not profit—that’s without payroll, lease, and other operating expenses. So when gas stations drop prices to less than 50 percent of the average, it is clearly unsustainable. It’s safe to say that on that day, all three stations were operating at loss—and probably a big one.

Will it resonate? Perhaps, for a short while; but Americans are notorious for finding out where gas is cheapest. They even use new GPS navigation systems for live gas pricing while driving.

But even without cut-throat price wars, Michigan residents should revel in the fact that gas prices in the state are the fifth lowest in the nation, with prices dropping 13 cents per gallon two weeks in a row, according to AAA, to an average of $1.60 per gallon, and the lowest Michigan gas prices in the capitol city area, where they hover around $1.47 per gallon.

According to the CPI calculator that would be .08 cents in 1971 dollars. I remember in the hottest of price wars when I was in high school the lowest it EVER got to in the late 60's, early 70's in west Michigan was .19 a gallon at the cheapest discount stations.
And yeah, driving any sort of distance to Houghton Lake to get gas that cheap, except perhaps just to say you did it...was folly. Gas back up to 1.77ish in west michigan as I type. No complaints here!